September 26, 2019
Certain Trends Shaping the Mortgage Market
2019 has brought a number of changes to a mortgage market already beset by alterations in its buyership. And in a March report, the Urban Institute took a look into some other major structural trends that are set to shape the mortgage market for years to come.
For one thing, the Federal Housing Finance Agency has moved to unify Fannie Mae’s and Freddie Mac’s mortgage-backed securities—which have previously been kept separate. The new comingled security is being referred to as unified mortgage-backed security (UMBS). The final rule released on this topic by the Agency makes it a requirement that the two GSEs bring their policies, programs, and practices that might impact the cash-flows of prospective holders of eligible mortgage-backed securities. The UMBS went live on June 3rd, and how they trade is being carefully watched to see how they shape the mortgage-backed securities market.
A second potential market-changer comes in the form of alterations the Federal Housing Administration is making to what is referred to as its “credit box.” The Administration is concerned about endorsing higher-risk mortgages. To mitigate this concern, the Agency will be referring to certain higher-risk mortgages to be manually underwritten. Naturally, this will take more time and increase cost for lenders to process the loans. The report indicates that the Urban Institute does have concerns that this move will have detrimental effects on the availability of credit to lower-income borrowers.
And lastly, the indications, despite fluctuations in the rates, are that the housing market is going through a macro trend in the downward direction. 2018’s first lien origination volume finished at $1.63 trillion, as compared to 2017’s $1.81 trillion. And the inventory of housing remains a serious concern, as it also trended downward through 2018. Naturally, this trend will need to be monitored through the course of 2019 in order to know what the next year-over-year figures reveal.
Nonetheless, it remains a good time to buy if one can find a home to purchase. And when one buys, it is important that they receive clear title to their new property. Topouzis & Associates, P.C. is the home buyer’s bulwark against problems of the past. We do title searches and ensure you are gaining clear title to your property—and we back our services with offerings of title insurance (click here), in case someone along the line of ownership did something that will weaken your title at some point in the future.